Steel production increase in the U.S.
Previously in this series, we looked at the stagnant steel production levels in China and the European Union. In this article, we’ll examine steel production in the U.S. using the August steel production data released by the World Steel Association.
Some of the major steel companies listed in the U.S. are ArcelorMittal ADR (MT), United States Steel Corporation (X), Nucor Corporation (NUE), and AK Steel Holding Corporation (AKS). These companies form the investment universe of the SPDR S&P Metals and Mining exchange-traded fund, or ETF (XME).
Steel production increased by 2.9% in August
Steel production in the U.S. increased by 2.9% in August over the same period last year. This is significant, and it indicates that the growth in the U.S. steel industry is more than double the global average.
In a recent Market Realist series, we discussed the outlook for the U.S. steel industry. Read more in Must-know: Why steel investors are celebrating.
Steel production expected to increase at a faster rate
Steel consumption in the U.S. has been on an uptrend for the past several quarters. Steel production, meanwhile, increased at a slower pace over the same period. Increasing imports mean that the benefits of increased steel consumption are going to foreign manufacturers rather than U.S. steel companies.
The U.S. Department of Commerce (or DOC) recently took a tough stance against these imports. U.S. steel companies have complained for a while, alleging dumping by foreign steel companies. Dumping is the practice of selling goods at a price lower than the cost of manufacturing in an overt attempt to harm the local industry.
Backed by a resilient economy and import checks, however, steel production in the U.S. is expected to increase at a faster rate soon.
Next, we’ll look at steel production in India.